Is The Internet Stealing Sales?

With department stores struggling in beauty, the best guess is that sales are filtering to mass. But, when NPD and Information Resources Inc. recently put their heads together to track sales, they found growth was in another avenue.

New research suggests swelling sales could be coming from more people buying beauty online. As this reporter was reading this research, a friend called to tell her she was placing her first Drugstore.com order.

The study is called Emerging Channels Series: Beauty Care Products, Special Focus: The Internet from NPD Group. The research uncovered that the Internet gained one percentage point. The channel was the only one to experience an increase in the number of women who reported mentions for beauty products.

Indeed, the Internet is still a small channel for beauty. But, there is a higher ratio of women saying they are spending more relative to those who said they are spending less on beauty in the past year. The average annual beauty spend per woman is $86 on the Internet. The ease of shopping online and product availability continues to be what is driving Internet shoppers who spent more via this channel than in the prior year.

What makes more women try the Internet? The poll suggests with higher gas prices and fewer trips to the mall, they are willing to try cyber shopping. Those who buy on the Web also seem to be heavier users who most likely know what they want and aren’t afraid to try online. The Internet has also become such as hotbed of research for beauty that some have decided to order online instead of just doing their homework. In the case of the friend ordering for a first time, there was a two-for-one offer she “couldn’t resist.”

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Another new study out, though, suggests consumers might be ready to come out of their hibernation. Research from WSL Strategic Retail reports 25 percent of shoppers are planning to spend for the first time in six months. “Even as we see recovery in some categories of purchases, shoppers will never return to spending in the same way they did before the economic crisis,” said Wendy Liebmann, CEO of WSL Strategic Retail on the release of the special report How America Shops in Crisis 2009. “While the current fear is unemployment, we see signs the frugal life is wearing thin, with 25 percent of all shoppers ready for a splurge — at the top of their lists are a vacation, a night out, or a new outfit.” Health and beauty was one category Liebmann found where consumers indicated they were ready to spend again. The challenge will be for brick-and-mortar retailers to lure them back.

NEXT: People, Place and Things >>

People, Place and Things

A few words with Essie Weingarten, founder and president of the nail polish firm that bears her name. She plans to launch a nail color collection inspired by jewelry designer Judith Ripka — and not only will each bottle of polish be infused with diamond dust, but also three bottles will have an extra special gift-with-purchase: one will contain a diamond, a second a sapphire and the third an emerald. WWD’s Julie Naughton chatted with Weingarten.

Weingarten: “What’s not to love about buying a $15 bottle of nail polish that might have a diamond, sapphire or emerald in it? Judith loves diamonds as much as I do, and she is known for her beautiful jewelry designs with precious and semiprecious stones — so the tie-in made sense.”

“The collection is available in August and includes three colors: Put a Ripka Ring on It, Heart My JR Jewels and Queen of Hearts. Each of the shades is infused with diamond dust, intended to give the colors a soft glow that isn’t sparkly. The diamond dust also makes the colors adhere more strongly to nails.”

What’s In Store

Rite Aid Goes Wild: Rite Aid has announced that the eco-friendly hair care line David Babaii for WildAid, developed by actress Kate Hudson and Babaii, her hairstylist, is now available in Rite Aid’s nearly 4,900 stores nationwide. According to Babaii, the products are sulfate free, paraben free, free from animal products and, most important of all, free from ALL animal testing.

Lumene Innovation: Lumene has long turned to natural treasures of Finland for ingredients and that is the case again with Lumen Excellent Future Deep Repairing Cream and Serum. The magic ingredient is Applexcell, a modern apple extract combined with Lumene’s signature Arctic White Peat.